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February 27, 2013

Minority-Owned Businesses Ripe for Cash Infusions

The interest in social impact investing—putting cash into business ventures that have a social mission as their end-goal and yet are also profitable—has been growing steadily in the past years, but one of the biggest challenges faced by private equity players and venture capitalists in this area is finding worthwhile projects to which they can deploy their investments.

That’s where a firm like Jalia Ventures comes in.

The New York City-based organization brings venture capital and private equity investors together with socially oriented, minority-owned businesses that have the potential to grow—businesses identified by Kesha Cash, director of investments at Jalia.

“Very often, minority-owned enterprises don’t even know they have the potential to become bigger,” Cash (left) says. “We teach business owners what it really means to be a social enterprise player and how to position themselves in order to get access to capital.”

Thus far, Jalia has invested in ventures like Red Rabbit, a Harlem-based food services company that supplies 20,000 healthy school meals daily and has revenue of $7 million and growing; Dental Kidz, a pediatric dental practice that has served more than 9,000 low-income children in Newark; AgLocal, a NewME Accelerator startup that raised $1.5 million to develop an online marketplace for family farms; and Peartree Preschool, a eco-friendly preschool that will open its first center in Harlem this year to serve 120 young people.

There are a great deal more “great ideas and great businesses out there” in the minority business space, Cash says, but still, many ventures with inherent social missions that have the potential to be scaled up greatly with a for-profit model are reluctant to take on outside capital.

“For many entrepreneurs of color, this is their first take at building wealth,” she says. "It’s not something they have any experience in, so they’re naturally out to protect it.”

Jalia’s goal, Cash says, is to educate businesses on the ins and outs of getting money for the first time. But the firm also works to familiarize investors with the people behind the ventures they’re funding.

“Very few people from the investment side look like people in the communities that these businesses want to serve, so we want to be able to start a dialog and get people comfortable with each other in order to facilitate an exchange,” she says.

Jalia Ventures was launched nearly three years ago with the support of Josh Mailman, son of New York philanthropist and investor Joseph L. Mailman, through his firm, Serious Change LP.

Cash became passionate about social impact investing and increasing its impact through a for-profit model while studying for her MBA at Columbia University.

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